Within the past 5 days, Meta (META) shares have risen over 14% after beating Wall Street estimates in its fourth quarter, posting $40.11 billion in revenue versus an expected $39.18 billion expected. As Wall Street continues to focus on AI and tech leaders, many investors question who will be the top players in the space.

Raymond James Managing Director Josh Beck joins Yahoo Finance to discuss why Meta's performance and investments in AI will make them a top leader in the space.

Beck explains his bullish call on Meta when it comes to AI: "They're a little bit of [an] unsung hero, I would say. When people think of AI, I think they think of Nvidia (NVDA), they think of Microsoft (MSFT), rightfully so, both companies have done really well. What I think has gone unnoticed is really some of the incremental monetization opportunities in advertising..."

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Editor's note: This article was written by Nicholas Jacobino

Video Transcript

BRAD SMITH: Well, one of the major themes of this earnings season has been big tech and AI. Upbeat results from Mag 7 giants, Amazon and Meta, at least, driving markets higher last week. Meta shares rising 20% after beating the Street's estimates in the fourth quarter. Shares up 15% over the last week in aggregate here. Now investors are particularly optimistic around the company's AI goals.

Our next guest is bullish on Meta's future as one of three big AI leaders. Here with more, we've got Josh Beck, Raymond James Managing Director of Equity Research. Great to have you here with us today. So take us into your thesis on Meta after this year of efficiency and after this turnaround that Mark Zuckerberg and team have had to really chart.

JOSH BECK: Yeah, well, thank you for having me on the show. Yeah, last year was really about recovering from some of the privacy headwinds in the industry and instilling efficiency in the company. Obviously, there was a growth at all costs mindset really across tech. And I think Meta really embraced being able to grow and show profits.

And this year '24, we really think the lens for tech is your AI strategy and your AI monetization path. So it's less about just growth at all costs, less about efficiency, all about AI. And we really think that Meta scores very favorably. They're a little bit of an unsung hero, I would say.

When people think of AI, I think they think of NVIDIA, they think of Microsoft. Rightfully so. Both of those companies have done really well. But I think what's gone unnoticed is really some of the incremental monetization opportunities in advertising. So think about serving content that's more personalized, it's more likely to generate an interaction. That's really helpful to Meta's model. And that's why we actually think they can grow 2x the ad industry in '24.

SEANA SMITH: Wow, Josh, that certainly is a very bullish call. And putting in perspective, a lot of what we heard on the earnings call last week from Meta, from Zuckerberg, and also just what that then means for the opportunity going forward. When you're stacking up Meta versus Microsoft versus NVIDIA, like you just talked about, not exactly are always top of mind, at least when it comes to AI plays. When it comes to some of those other opportunities out there, where do you stand on the fact that, hey, a lot of this hype has certainly already been built up or built into the valuation of some of these premium names?

JOSH BECK: This is a top investor question, which is where are we in the hype cycle? Is there still profits to be had? And our view is decidedly yes. We look at it really in a few different ways, but a lot of the interest and success that you've seen with NVIDIA, for example, has really been an infrastructure and data center build. So that's more or less step 1 to really creating these new AI services.

Step 2 is certainly implementing them in the consumer space, as we've talked about with Meta, and the enterprise space where we see more opportunity for Amazon. And those initiatives are still really early stage in my view. Meta has seen some nice lifts in engagement, but we really think it's actually very early.

And we also think they're doing some very unique innovation around the advertising stack that will eventually boost returns for advertisers. And to us that's very early stage. The best barometer for this is really looking at them outperforming the broader market. And they really have not, if you look at the last two years. But in years '24 and '25, we do think Meta will outperform.

So we think that the investor focus will shift from more or less building the infrastructure to monetizing these data centers. And we think, certainly, Meta on the consumer side and Amazon on the enterprise side are very well positioned here.